The U.S. arrest of Iranian-born Reza Zarrab reverberated in Turkey on March 22 as the well-connected gold trader was at the center of a bribery scandal that once engulfed Turkey's leadership.

The U.S. charges that Zarrab helped the Iranian government and businesses get around economic sanctions came as a blow to Turkish President Recep Tayyip Erdogan, who has repeatedly insisted that 2013 allegations of corruption against him and his inner circle were nothing more than a coup attempt.

The scandal centered around Zarrab in 2013 prompted Erdogan to dismiss thousands of state employees, police officers, and prosecutors, putting many in jail. Many were forced to leave the country.

Zarrab is denying any wrongdoing in either the U.S. criminal case filed on March 21 or the 2013 Turkish public investigation, saying his business was legitimate. All charges against him and members of Erdogan’s government were eventually dropped.

Zarrab, who holds Turkish and Iranian citizenship, was charged and detained in the graft probe in Turkey in 2013. In that case, he was accused of bribing ministers in Erdogan’s cabinet with millions of dollars in cash and gifts to help facilitate trade in gold with Iran.

Zarrab and his accomplices began using a network of companies in Turkey and the United Arab Emirates to transact business on Iran’s behalf and defraud the United States, according to the U.S. indictment.

Companies benefiting from the scheme included Bank Mellat, an Iranian government-owned bank, the National Iranian Oil Company, and the Naftiran Intertrade Company, it said.

In a television interview on Turkey’s pro-government A Haber news in April 2014, Zarrab estimated he had facilitated the transfer of about $12 billion in gold to Iran.

Erdogan defended Zarrab after the Turkish investigation was dropped, calling him a "philanthropist" whose business had "contributed to the country."

The announcement of Zarrab’s arrest in Miami where he was vacationing with his wife and children came a week before Erdogan is scheduled to visit the United States.

Zarrab's detention also shook the Turkish stock market on March 22 and unnerved investors in Turkey's state-controlled Halkbank, which was under scrutiny in the 2013 investigation.

Shares of the Turkish bank dropped more than 8 percent on March 22, forcing the bank to issue a statement saying it is not the subject of investigation in Turkey or the United States.

Zarrab was born in Iran but grew up in Turkey and shares a $72 million villa on Istanbul’s waterfront with his wife, Ebru Gundes, a Turkish pop star and celebrity.